Construction boom at city campuses

Despite millions of dollars of investment to provide state-of-the-art facilities, international competitors are outspending us and our universities are slipping in global rankings.

An architect's impression of the new Science Centre to be built at Auckland University. Photo / Supplied

Special report: Auckland universities

Auckland's universities are spending hundreds of millions of dollars on new buildings, transforming not only their campuses but the shape of the city they serve.

The unprecedented construction has provided some of the largest construction jobs in Auckland in recent years.

But while today's students are benefiting from state-of-the-art facilities, New Zealand universities are being matched or outspent by international competitors.

That, Auckland University warns, could affect enrolments of high-fee paying international students, which the tertiary sector is increasingly reliant on.

Last month Auckland University of Technology (AUT) opened its new $98 million Sir Paul Reeves building on Mayoral Drive. Up the road, Auckland University is in the midst of an estimated $1.2 billion campus renewal project, including starting work on a $200 million Science Centre on the corner of Symonds and Wellesley Sts.

And on the North Shore, Massey University is to sell land at its Albany Campus to fund new construction including a recently completed $100 million library and $20 million student centre.

Each university has its reasons for building. Auckland University, opened in 1883, needs to upgrade or replace tired facilities. It also plans to bring its campuses together by selling land at Tamaki and Epsom, and building a Newmarket campus on the former Lion Breweries site.

AUT, the country's newest university, has continued a maturation process which has seen it replace rented facilities with its own new buildings in the central city, and create a new South Auckland campus at Manukau.

Massey University is continuing to build for a growing roll at its Albany campus, which now serves an immediate community of 300,000.

Another reason for the building boom is competition. But while the universities admit they keep an eye on each other, they say the real threat is from overseas.

In 2008 a change to Government funding effectively capped domestic student numbers - and the funds that go with them - meaning growing international students is now vital for New Zealand universities.

And old, draughty lecture theatres are no longer acceptable.

"Students are much more aware of the level of facilities that they want, but also just the look of the campus, and feeling like they are somewhere special," said Steve Maharey, vice-chancellor of Massey University.

"If the estate that they come to does not look world class, then they are going to judge the university much more on that than they would have 20 years ago."

Mr Maharey has recently returned from a conference in Australia where he was wowed by the level of building investment there, including a huge "space age" redevelopment of Macquarie University. That level of spending was also transforming universities in countries such as China, Singapore and India, said AUT vice-chancellor Derek McCormack.

"We used to think of the Asian countries as being those that were delivering students to other countries that supplied the education, but that might be turning around.

"It's a very big market, but one that is changing all the time. New Zealand has been very good in the international market for university education ... but you can't rest on your laurels."

Auckland University, which has 32,000 equivalent fulltime students, is aiming to significantly grow only its international student numbers, at present around 5000.

"Whereas the price we can charge domestic students is fixed by the Government, the price we can charge international students is fixed by the ability of the market to pay," said Auckland University vice-chancellor Stuart McCutcheon. "Financially, if it were not for international students, most New Zealand universities right now would be making a loss."

Before the university starts work on major projects, such as a $200 million rebuild of its engineering school, it sends a team to benchmark against equivalent institutions, particularly in Australia.

But Mr McCutcheon said that with Australian and US universities actively targeting undergraduate and postgraduate students in Auckland, universities were struggling to keep the best New Zealand students.

Australian universities typically operated with about 50 per cent more funding per student than their New Zealand counterparts, he said.

"There's no doubt that New Zealand is losing significant numbers of very good students to the international universities ... we're at the bottom of an unlevel playing field."

Auckland University has used a public-private partnership to build a new halls of residence on the former site of Carlaw Park, which it will lease.

Philanthropy, such as Owen Glenn donating $7 million to help build the Owen G Glenn Business School in 2008, has also helped.

However, most of the renewal programme will be financed by the university's operating surplus, borrowing up to $300 million over the next decade, and a proposed sell-off of land at Epsom and Tamaki. Massey University will finance its projects partly by selling off a large parcel of land across the road from Albany High School this year.

AUT, with around 19,000 equivalent fulltime students, has spent about $350 million on facilities over the past decade, mostly funded from its cash flow, some special grants from Government, and by taking on debt.

Mr McCutcheon said that despite those financing efforts, New Zealand universities were slipping in global rankings. While performances were improving, the rise of much more well-funded rivals overseas - in traditional and emerging markets - had hurt, he said.

"That's a huge problem, because international students particularly use the world rankings as the mark of quality."

THE BUILDING PROJECTS

Auckland University

Upgrading or replacing tired facilities, and bringing campus together with planned building of Newmarket campus.